Scottish firm Morton Fraser has posted a 2 per cent drop in revenue and a 7 per cent profit hike for 2011-12 in a year in which it de-equitised three partners.
The firm, which said it was “actively seeking” a UK-wide merger, has announced an unaudited turnover figure of £14.3m, compared with £14.6m last year.
Meanwhile, net profit has risen 7 per cent from £3.6m to £3.9m, with this figure covering remuneration available for distribution to equity and fixed-share partners. Chief executive Duncan Murray said the firm could not provide a figure for the net profit distributable just to equity partners, but added that the partnership restructuring had led to a “significant” rise in profit per equity partner.
Murray said a drop in litigation work led to the practice seeing the biggest revenue drop in the firm, with the group contributing 43 per cent of the firm’s fee income.
Corporate and commercial property were roughly flat, accounting for 19 per cent and 15 per cent of firmwide revenue respectively. The firm’s private client practice was responsible for 23 per cent of turnover and saw the best performance out of the firm’s four key groups.
Murray also said the firm had decreased the size of the equity partnership by three partners over the past financial year as a move to restructure the partnership.
He said: “I think it’s an ongoing process of looking at the value and contribution of the partnership.”
The 32-strong partnership is now roughly 75 per cent equity partners and 25 per cent fixed-share partners. The firm has no salaried partners, with average earnings per partner now standing at£121,875, up 11 per cent from £110,000.
Murray added in a statement: “Despite a slight fall in revenue, reflecting the challenging state of the legal services market and economy, Morton Fraser has performed well. We’ve restructured successfully to ensure our costs are in line with revenue and retained a focus on providing expertise and value for our clients. The reshaping of the partnership has also led to a significant rise in profit per equity partner.”
The firm’s key recent clients wins include the Ministry of Defence, the Scottish Government and City of Edinburgh Council.
Murray added: “In the next year we’ll be reinvesting profits in updating our IT. Our vision and ambition is to create a UK-wide business. We believe mergers will be key to building scale and brand and we’re actively seeking the right merger partners.”